SEBI has issued a Final Order under Section 12(3) of the SEBI Act, 1992 read with Regulation 27 of SEBI (Intermediaries) Regulations, 2008, against Basan Financial Services Limited, a registered Merchant Banker (Registration No. INM000011989, PAN: AAECB3249H). The order follows an inspection conducted on September 8, 2023 at the Noticee’s registered office in Hyderabad, covering the period April 1, 2022 to June 30, 2023, during which multiple violations of MB Regulations and PIT Regulations were identified.

Key Points

• Basan Financial Services Limited is a SEBI-registered Merchant Banker (INM000011989) based in Hyderabad
• SEBI inspection was conducted on September 8, 2023 for the period April 1, 2022 to June 30, 2023
• Inspection findings were communicated via letter dated November 29, 2023; Noticee responded on December 18, 2023
• Designated Authority issued pre-Enquiry Show Cause Notice on February 26, 2024
• Noticee filed reply on April 10, 2024 and availed personal hearing on April 23, 2024
• Enquiry Report dated May 17, 2024 was submitted by the Designated Authority confirming violations
• Post-enquiry Show Cause Notice issued December 4, 2025 preceding this Final Order

Regulatory Changes

No new regulatory changes introduced. This order enforces existing provisions under:

• SEBI (Merchant Bankers) Regulations, 1992
• SEBI (Prohibition of Insider Trading) Regulations, 2015
• SEBI (Intermediaries) Regulations, 2008 (Regulations 25, 26, 27)
• SEBI Circular dated January 22, 2007 (dedicated complaint email ID requirement)
• SEBI Circulars dated May 6, 2008 and May 14, 2012 read with Regulation 28(2) of MB Regulations (half-yearly reporting)

Compliance Requirements

The violations established against Basan Financial Services Limited include:

1. Failure to maintain a dedicated email ID for redressal of investor complaints, in violation of SEBI Circular dated January 22, 2007
2. Failure to submit Half Yearly Reports during the inspection period, in violation of SEBI Circulars dated May 6, 2008 and May 14, 2012 read with Regulation 28(2) of MB Regulations
3. Additional violations (details in full order) related to MB Regulations and PIT Regulations

All registered merchant bankers must ensure: maintenance of a dedicated investor complaint email ID, timely submission of half-yearly compliance reports, and adherence to all applicable SEBI circulars and regulations.

Important Dates

• April 1, 2022 – June 30, 2023: Inspection period
• September 8, 2023: SEBI inspection conducted at Hyderabad office
• November 29, 2023: SEBI communicated inspection findings to Noticee
• December 18, 2023: Noticee submitted response to inspection observations
• February 26, 2024: Designated Authority issued pre-Enquiry Show Cause Notice
• April 10, 2024: Noticee filed reply to pre-Enquiry SCN
• April 23, 2024: Personal hearing availed by Noticee
• May 17, 2024: Enquiry Report submitted by Designated Authority
• December 4, 2025: Post-enquiry Show Cause Notice issued
• April 7, 2026: Final Order issued

Impact Assessment

This order has limited direct market impact as it targets a single merchant banker. However, it signals SEBI’s continued enforcement vigilance over intermediary compliance, particularly regarding:

• Basic operational requirements (investor grievance mechanisms)
• Periodic reporting obligations
• Adherence to PIT Regulations

Other merchant bankers and intermediaries should review their own compliance with dedicated complaint email IDs and half-yearly reporting schedules to avoid similar enforcement proceedings. The multi-year timeline from inspection (2023) to final order (2026) illustrates SEBI’s comprehensive due process in intermediary enforcement actions.